Local business owner joins effort to sue State

By: 
Charlie Denison
Reporter

Local business owner Sue Zellick joined Policyholder Steering Committee’s lawsuit against the State.
Photo by Charlie Denison

A Lewistown restaurant owner has joined forces with many others from around the state to sue the State of Montana.

Why?

In November, Montana legislators passed Senate Bill 4, which imposes a two-time fee of $15 million by the Montana Board of Investments on the assets of the Montana State Fund.

Governor Steve Bullock signed this bill into law, but some question the bill’s constitutionality.

Sue Zellick, owner of Taco Time and Ruby’s, stands by this lawsuit, which was created by the newly formed Policyholder Steering Committee.

“I’ve been paying into the state fund for the better part of 20 years,” Zellick said. “And, as a policyholder, I was told these funds would only ever be used by the policyholders or by our injured workers.”

The Montana State Fund, Zellick said, is responsible for funding Workers Compensation claims in Montana, especially for Main Street Montana businesses, which Zellick said makes this feel like “an attack on small businesses.”

“The money doesn’t belong to the Government,” she said. “It belongs to the policyholders. That was a big red flag for me.”

This is the second lawsuit filed against the State of Montana. The first lawsuit – filed by the Montana State Fund – was withdrawn after Bullock “changed the makeup of the Board, appointing two new members to replace two existing members,” according to a Policyholder Steering Committee news release.

“The State Fund had initiated this lawsuit because they knew it was illegal for the legislature to say they were going to take these funds,” Zellick said. “Then, as soon as directors filed the lawsuits, the Governor went in and replaced the board so the law suit would be canceled. To me, that’s just dirty politics.”

This is not the first time something like this has happened in Montana, Zeller added.

“[The government] did this in the 80s,” Zellick said. “They drained the fund totally and went broke.”

The Policyholder Steering Committee filed an independent action “on behalf of policyholders and injured workers” shortly after MSF withdrew the original lawsuit.

Represented by McLean and Associates in Missoula, the Policy Steering Committee is moving forward to protect their assets. State Representative Greg Hertz of Polson leads the way as Policy Steering chairman.

“The big question we need to answer is ‘who owns the money in the Montana State Fund?”’ PSC Chairman Greg Hertz said. “That’s what we hope to reveal in the lawsuit.”

Hertz said more than 25 business owners have joined the lawsuit, but not all of them will be listed as plaintiffs.

“The list of interested businesses grows every day,” he said. “We are getting more and more calls as people become more aware of the issue.”

Zellick encourages other local business owners paying into the state fund to “join up and get involved.”

“If you’re a member of the state fund, that’s your money being taken away,” she said. “It’s money you were contractually promised.”

What the government is doing, Zellick added, is not prudent.

“Let’s say you saved up $100,000 toward your retirement…then the Government comes along and says, ‘We don’t think you need that much. We are going to take half of it, and we are going to tax you and nobody else.’ That’s what the Government is doing. They’re putting this new tax on the state fund and nobody else. It’s really an unfair tax for small businesses,” Zellick said.

Zellick added this is especially unfair because the state requires businesses to carry workman’s comp insurance for employees.

“If the fund is drained, businesses will have to buy new insurance outside of the state to cover our employees,” she said. “It’s very important to have it. You never know what kind of disaster can happen with any employer in the state.”

Zellick said those interested in joining the suit should contact Greg Hertz at (406) 253-9505.

“We’ve got to stand up for what’s right,” she said. 

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